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Monday, July 25, 2016

“Power to grant exemption from duty. = 1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon. 2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case exempt from the payment of duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable.” Section 25 of the Act delegates power to the Central Government i.e. the executive branch to grant exemption generally from duty whenever it finds that it is necessary to do so in the larger public interest either absolutely or subject to such conditions as may be specified in the notification or by a special order in each case under exceptional circumstances. As per Section 159 of the Act, any notification issued under Section 25 shall be placed before the Parliament and the Parliament may amend or reject the same. This clearly demonstrates that the ultimate law making power is vested with the Legislature. Hence, the allegation of the appellant that the notifications are issued basing on the whims and fancies of the 2nd respondent is misconceived. Whereas, notifications are issued generally in the larger public interest, the Legislature has given the power to exempt duty to the 2nd respondent subject to the amending power.-According to the appellant, the Central Government has issued notifications under Section 25(1) and he is also entitled to such a notification in respect of the commodities falling under the category 2208.10.When the appellant alleges discriminatory action on the part of the respondents, he has to establish that there is no rational basis for making classification between the goods which are notified and the goods of the appellant which are not notified. It is also a firmly established principle that the legislature understands and appreciates the needs of its people. A Taxing Statute can be held to contravene Article 14 of the Constitution if it purports to impose certain duty on the same class of people differently and leads to obvious inequality. Such a material is not placed before us to come to a just conclusion that the action of the respondents is discriminative. Hence, the same is held against the appellant. As far as the interest aspect is concerned, when the appellant is not entitled for the relief, there is no need for us to express any opinion on the interest aspect.

|REPORTABLE     |

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                     CIVIL APPEAL Nos.4676-4677 OF 2013

AMIN MERCHANT                           ….  APPELLANT
VERSUS
CHAIRMAN, CENTRAL BOARD OF
EXCISE & REVENUE & ORS.                 …. RESONDENTS

                                  JUDGMENT
N.V. RAMANA, J.

1.    These appeals, by  special  leave,  have  been  filed  against  the
impugned judgment and order dated 02.09.2011 in Writ Petition No.1761  of
2009 and order dated 24.11.2011 in Review Petition No.24 of 2011 in  Writ
Petition No.1761 of 2009 respectively, of the High Court of Judicature at
Bombay, by which the High Court has dismissed the Writ Petition filed  by
the appellant herein and also dismissed the Review  Petition  by  holding
that no error apparent on record has been made out.
2.    The facts  leading  to  these  appeals,  in  brief,  are  that  the
appellant imported eight consignments of goods falling under Tariff  Sub-
Heading 2208.10  of  the  Customs  Tariff,  namely,  “Compound  alcoholic
preparations of a kind used for the manufacture of beverages” during  the
financial years 1993-94 and 1994-95.  The  customs  authorities  assessed
the goods imported provisionally and subjected them to a prescribed  rate
of duty of Rs.300/- per liter or 400% whichever is  higher  specified  in
respect of Sub-Heading 2208.10 of the Customs Tariff for 1993-94 and 1994-
95.   The  appellant  claims  to  have  deposited  the  amount  of   duty
provisionally assessed on the assessable  value  declared  in  the  eight
bills of entry.  According to the appellant, he  cleared  the  goods  for
home consumption during financial years 1993-94 and 1994-95.  Between the
years 1994 and 2001 the appellant addressed several communications, inter
alia, to the Central Board of  Excise  and  Customs  and  to  the  Tariff
Research Unit (TRU) of the Union Ministry of Finance.  The  grievance  of
the appellant is that the  rate  which  has  been  prescribed  for  goods
falling  under  Tariff  Sub-Heading  2208.10  is  higher  than  that  was
authorized in the Budget Proposals during  financial  years  1993-94  and
1994-95.   The appellant took recourse to the provisions of the Right  to
Information Act  in  order  to  procure  relevant  information  from  the
concerned authorities.  According to the appellant, the authorities  have
not furnished the relevant information.
3.    Not satisfied with the attitude of the authorities,  the  appellant
preferred a Writ Petition before the High  Court  seeking  the  following
reliefs:   (a)  a  writ  of  Mandamus  directing  the  first  and  second
respondents herein to issue a notification u/s.25(1) of the Customs  Act,
1962 (for short ‘the Act’) in order to exempt goods falling under  Tariff
Sub-Heading 2208.10 so as to give effect to the Budget proposal announced
by the Finance Minister (FM) in Parliament for  financial  years  l993-94
and 1994-95;  (b)  a direction to the Chief Commissioner  of  Customs  to
finalize assessment of the eight bills of entry after a  notification  is
issued by the first and second respondents u/s.25(1) of the Act;   (c)  a
writ of Mandamus directing the second respondent to issue a  notification
u/s.25(2) of the Act for granting exemption from customs duty  for  goods
falling under Tariff Sub-Heading 2208.10 for financial years 1993-94  and
1994-95; (d) an order for refund after assessments are finalized and  (e)
an order for the payment of interest at the  rate  of  12%  p.a.  on  the
refund that is ordered.
4.    The High Court has dismissed the  Writ  Petition  by  the  impugned
judgment and order dated 2.9.2011.  Being dissatisfied with the dismissal
of his writ petition, the appellant preferred a  Review  Petition,  which
was also dismissed by the High Court by the impugned judgment  and  order
dated 24.11.2011.
5.    Heard the  appellant,  appearing  in  person,  and  learned  Senior
Counsel for the respondents.
6.    The appellant, appearing in person,  vehemently  submits  that  the
budget proposals for 1993-94  stipulated,  inter  alia,  a  reduction  in
effective rate of import duty on items which had then attracted a rate of
duty higher than 85%, to 85% advalorem, except on dried grapes,  almonds,
alcoholic beverages, ball and roller bearings and passenger baggage;  the
Budget proposals  for  1994-95  similarly  contemplated  a  reduction  in
effective rates of customs duty on items which  until  then  attracted  a
duty higher than 65%, to 65% except, inter alia, on alcoholic  beverages.
‘CAP of a kind used in the manufacture of beverages’ falling  under  sub-
heading 2208.10 of the Act are not covered by the said exceptions  ‘dried
grapes, almonds,  alcoholic  beverages,  ball  and  roller  bearings  and
passenger baggage’ as  mentioned  in  the  Budge  proposal  appearing  at
Sl.No.B 1.  Hence the  import  duty  on  ‘CAP  of  a  kind  used  in  the
manufacture of beverages’ falling under sub-heading 2208.10  should  have
been read as “85%” for the financial year 1993-1994 in keeping  with  the
Budget Proposal at  Sl.No.B1  duly  passed  by  the  Parliament  for  the
financial year 1993-94 so also for the financial year 1994-95, it  should
have been “65%”.
7.    The appellant would  further  submit  that  all  the  notifications
contained in the Explanatory Memorandum 1993-94 and 1994-95 were to  give
effect to  the  Budget  Proposals  duly  passed  and  legislated  by  the
Parliament and rectify the erroneous tariff rates prescribed by  the  TRU
department in the Customs Tariff Act, Finance Bill and  Finance  Act  for
1993-94 and  1994-95;  Budget  proposals  announced  by  the  FM  in  the
Parliament are duly passed and/or approved by the Parliament, no  person,
executive, bureaucrat or any authority or Court of Law has the  authority
and/or power to alter or amend the same.  If the executives  are  allowed
to prescribe any tariff rates  contrary  to  the  Budget  Proposals  duly
authorized by the Parliament, then the Budget Proposals  duly  passed  by
the Parliament will have no meaning and will  be  rendered  nugatory  and
thus opening the flood gates for ‘corrupt practice’.
8.    He also submits that the goods falling under sub-heading 2208.10 of
the Customs Tariff  Act  are  not  ‘alcoholic  beverages’  but  ‘Compound
alcoholic preparations of a kind used for the manufacture  of  beverages’
falling under sub-heading 2208.10 in the Customs Tariff Act  1993-94  and
1994-95, not being ‘alcoholic beverages’ and not  being  covered  by  the
exceptions mentioned in the said proposal at Sl.No. B1, the rate of  duty
duly passed and legislated by the Parliament should have been  prescribed
as 85% for the year 1993-94  and  as  65%  for  the  year  1994-95.   The
statutory term ‘Compound alcoholic preparations of a kind  used  for  the
manufacture of  beverages’  clearly  explains  that  it  covers  compound
alcoholic preparations for the manufacture of beverages and that it is  a
product that precedes the consumable ‘alcoholic beverage’  and  hence  it
cannot, by any stretch of imagination, be equated to  and  or  termed  as
‘alcoholic beverages’ in itself.  If “Compound alcoholic preparations  of
a kind used for the manufacture of beverages’ are sought to  be  included
in the term ‘spirits, liquors and  other  spirituous  beverages’  and  or
sought to be treated as ‘Alcoholic Beverages’  then  the  statutory  term
‘Compound alcoholic preparations of a kind used for  the  manufacture  of
beverages’ distinctly falling under sub-heading 2208.10 will be redundant
and such a perverse interpretation is not permissible as  it  will  alter
the statutory heading 22.08 and sub-heading 2208.10 in the Customs Tariff
Act,  1975.    He  would  further  submit  that  Harmonized   System   of
Nomenclature (HSN), an International Regulation   evolved in 1986 by  the
Customs Co-operation Council, Brussels, which is adopted by the Govt.  of
India, clearly recognizes that ‘CAP of a kind used in the manufacture  of
beverages’ are distinct and different products from ‘alcoholic  beverage’
which are  intended  for  immediate  consumption  and  in  the  said  HSN
Explanatory Notes dealing with sub-heading 2208 it  is  expressly  stated
that “these preparations are not intended for immediate  consumption  and
thus can be distinguished from the liquors and other spirituous beverages
of this heading”.
9.    In this connection, he places reliance on a Judgment of the  Bombay
High Court in Bussa Overseas and Properties  (Pvt.)  Ltd.  Vs.  Union  of
India, reported in 1991 (53) ELT  65  (Bom.),  wherein  the  Bombay  High
Court, while dealing with classification  has  held  that  goods  falling
under sub-heading 2208.10, namely, ‘CAP of a kind used in the manufacture
of beverages’ are not  consumable  as  such,  have  to  be  sold  to  the
distilleries where they undergo  a  process  and  cannot  be  treated  as
Whisky, Gin or Brandy as known in the trade.  Against the said  decision,
Union of India has preferred S.L.P.(C) Nos.13194-210/1991 in  this  Court
wherein this  Court  has  dismissed  the  aforesaid  SLPs  upholding  the
decision of the Bombay High Court.
10.   He also places reliance on a judgment of the High Court of Delhi in
Seagram Manufacturing  Ltd.  Vs.  Commissioner  of  Customs,  New  Delhi,
reported in 2003 (154) ELT 610 (Tri.Del.),  which  is  affirmed  by  this
Court reported  in  2004  (163)  ELT  A  205  (SC)  wherein  this  Court,
confirming the views of the Tribunal regarding classification, held  that
‘goods’ falling under sub-heading 2208.10 are not intended for  immediate
consumption and are not ‘alcoholic beverages and are  classifiable  under
sub-heading 2208.10 of Customs Tariff’.
11.   He  would  further  submit  that  the  TRU  department  has  issued
notifications for all other erroneous tariff rates prescribed by them  in
the Customs Tariff Act, Finance Bill and Finance Act 1993-94 and  1994-95
to give effect to the Budget proposals duly passed and legislated by  the
Parliament and the respondents cannot discriminate in  the  case  of  the
appellant and refuse to issue notifications.
12.   He further submits that  he  is  seeking  a  suitable  notification
prescribing Customs Tariff of 85% and 65% on  goods  falling  under  sub-
heading 2208.10 to give effect to the budget proposals at Sl.No.B 1  duly
passed and legislated by the Parliament for the years 1993-94 and 1994-95
since collection of tax without authority  of  law  is  in  violation  of
Article 265 of the Constitution and violation of the appellant’s right to
property under Article 300 A of the Constitution and return of the excess
amount of Rs.5,62,46,722/- (Rupees Five core sixty two  lakhs  forty  six
thousand seven hundred and twenty two only) collected  from  him  at  the
time of provisional assessment for imports made during the years  1993-94
and 1994-95 with simple interest @ 12% p.a.  On the point of interest, he
would submit that the respondents are  liable  to  pay  interest  on  the
excess duty unlawfully collected from him since 1993-94 and  1994-95  and
having retained the same since the last 20 years.  In this connection, he
places reliance on Sandvik Asia Ltd.  Vs.  Commissioner  of  Income  Tax,
Pune, reported in [(2006) 150 TAXMAN, 591 (SC)].
13.   He would  further  submit  that  the  Courts  can,  in  exceptional
circumstances like the present one, compel officers of Respondent No.2 to
issue appropriate notification u/s.25(2) of the  Customs  Act,  1962,  in
order to give effect to the Budget Proposals so as to levy  duty  on  the
appellant’s imports only at 85% for the F.Y. 199-94 and 65% for the  F.Y.
1994-95.  In this connection, he places reliance on a  judgment  of  this
Court in Choksi Tube Co. Vs. Union of India reported in 1998(97) ELT  404
SC.
14.    He  would  further  contend  that  the  respondents/revenue   have
illegally collected import tax/import duty without any authority  of  law
and  deprived  the  appellant  of  profits  of   the   said   amount   of
Rs.5,62,46,726/-  since  1993-94  and  1994-95   and   thereby   put   an
unreasonable  restriction  on  the  appellant’s  fundamental   right   as
guaranteed by Article 19(1)(g) of the Constitution, to carry on his trade
and business since 1993-94 and 1994-95.  In support of  this  contention,
he places reliance on a Judgment of this Court in Mohammed Yasin Vs. Town
Area Committee, Jabalpur & Anr.  reported in AIR 1952 SC 115.
15.   Per contra, learned Senior Counsel  for  respondents  would  submit
that the speech of the Finance Minister while  presenting  the  Budgetary
Proposals only highlights the more important  proposals  of  the  Budget;
Budgetary changes are, in fact, enacted by the Parliament as contained in
the Finance  Bill  or  ratified  by  Parliament  or  implemented  through
notifications.  The legal force for charging a particular rate of customs
duty on import of goods, is  derived  from  the  First  Schedule  of  the
Customs Tariff Act, 1975 read with notifications issued u/s.25(1) of  the
Act.  If any changes in the rates were intended by  Parliament  it  would
have been reflected in the respective Finance Bills.
16.   He further submits that there was no error or  discrepancy  between
the budget proposals announced by the Finance Minister  and  the  Finance
Bill.  According to him,  the  High  Court  has  rightly  held  that  the
appellant did not dispute the fact that the goods imported  by  him  fell
within Tariff Heading 2208.10 and the position under the Finance  Act  of
1993 was that the rate of duty prescribed for Tariff sub-heading  2208.10
was Rs.300/- per liter or 400% whichever is higher  and  the  High  Court
thus rightly held that budget proposals and the  speech  of  the  Finance
Minister in Parliament may or may not accept the proposal as held in B.K.
Industries V. Union of India reported in (1993) 65 ELT 465 (SC) and  once
Parliament has duly legislated, and a  rate  of  duty  is  prescribed  in
relation to a particular tariff heading that constitutes the authorities’
expression of the legislative will  of  Parliament;  the  speech  of  the
Finance Minister  and  the  financial/budget  proposals  duly  passed  by
Parliament are two separate and distinct documents; the law as enacted is
what is contained in the Finance Act after it is legislated upon  by  the
Parliament.   Budgetary   proposals   constitute   legislative   material
antecedent to the enactment of law.  The rates of tax are those which are
prescribed by legislation, once it is enacted by Parliament.  It  is  the
law as enacted, which gives expression to legislative will and it is  the
law as enacted which prescribes the rate of tax which Parliament has duly
imposed.  Consequently, as a matter  of  first  principle,  it  would  be
impermissible for the Court to undertake the exercise of entering upon  a
scrutiny of the correctness of the collective expression  of  legislative
will which  finds  expression  in  the  legislation  as  adopted  by  the
Parliament.
17.   In his submission, the Court cannot undertake a scrutiny of whether
there was an error on the  part  of  the  Parliament  in  legislating  to
provide a particular rate of duty.  The power  to  issue  a  notification
u/s. 25(1) of the Act has been  conferred  upon  the  Central  Government
where it is satisfied that it is necessary in the public interest  so  to
do.  Under sub-section (2) of Section 25,  the  Central  Government  may,
where it is satisfied that it is necessary in the public interest  so  to
do, by special order in each case, exempt from the payment of duty, under
circumstances of an exceptional nature to be stated in  such  order,  any
goods on which duty is leviable and this Court has observed in  the  case
of Union of India Vs. Jalyan Udyog reported in [1993(68) ELT 9 (SC)] that
“the Parliament cannot constantly monitor the needs of and  the  emerging
trends in the economy and is in no position to engage itself  in  day-to-
day regulation and adjustment of import-export trade.   Accordingly,  the
power is conferred upon the Central Government to provide  for  exemption
from duty  of  goods,  either  wholly  or  partly  and  with  or  without
conditions, as may be called for in public interest.  We see  no  warrant
for reading any limitation into this power.”
18.   According to him, the Government of India i.e.  the  TRU  is  fully
empowered to decide the quantum of levy of duty on a particular commodity
and to define it.  Therefore, no wrong was committed by the TRU  when  it
held that the commodity imported by the appellant did not enjoy the  peak
duty structure of 70% but fell under the exceptions and  replied  to  the
appellant accordingly.  The Court, therefore, would not be  justified  in
directing the Central Government to issue a notification in this case.
19.   He would further contend that the goods imported by  the  appellant
were cleared provisionally on payment of duty prescribed in  the  Customs
Tariff Act, 1975; the imported compound alcoholic preparation  was  known
as “concentrated extracts”.  Compound Alcoholic Preparations are used  in
the  manufacture  of  various  beverages  and  are  not   for   immediate
consumption.  The claim of the appellant-importer that duty  should  have
been imposed at the rate of 85% for 1993-94 and 65% in  1994-95  and  the
claim that  he  had  paid  excess  duty  of  Rs.5,62,46,726/-  cannot  be
sustained since all these consignments were  assessed  provisionally  and
the goods were classified under Chapter Tariff Heading No.2208.10 of  the
First Schedule to the then Custom Tariff and accordingly, the goods  were
assessed provisionally and cleared on payment of appropriate duties.
20.   According to him, the further contention of the  appellant-importer
that exclusion in peak rate covers alcohol  beverages  but  his  imported
goods  are  “compound  alcoholic  preparation  of   a   kind   used   for
manufacturing of beverages” which is not alcohol beverage and, therefore,
not hit by the exclusion clause, cannot also be sustained.
21.   According to him, the contention of the importer  that  during  the
impugned period, the peak rate of duty was 150% as announced by the FM in
his Budget Speech also cannot be sustained because the proposed  rate  of
maximum 150% was applicable to goods other than alcoholic  beverages  and
passenger baggage.  The speech of the FM in this regard  was  very  clear
and there is no ambiguity in the speech.  Alcohol beverages and passenger
baggage have been taken out of the  cover  of  maximum  150%  rate  duty.
Hence the contention of the appellant-importer that the impugned imported
goods were covered by FM speech for 150% rate duty is  incorrect  and  in
fact this is contrary to what was contemplated in the Customs Tariff Act,
1975 and the HSN Explanatory Notes.
22.   We  have  considered  the  extensive  arguments  submitted  by  the
appellant/party-in-person and gone through the voluminous  record  placed
before us and the respective submissions of the  learned  senior  counsel
for respondents.
23.   Before adverting to the various arguments advanced  by  both  sides
and the findings recorded by the Court below, we deem it  appropriate  to
extract the relevant Tariff Entry 2208.10 under the Customs Tariff  1993-
94 and 1994-95, which reads:
|Heading |Sub-       |Description of       |Rate of duty     |
|No.     |heading    |article              |Stand-           |
|        |No.        |                     |Preferential     |
|        |           |                     |ard       areas  |
|22.08   |2208.10    |Compound alcoholic   |Rs.300 per litre |
|        |           |preparations of a    |or 400% whichever|
|        |           |kind used for the    |is higher….      |
|        |           |manufacture of       |                 |
|        |           |beverages.           |                 |

24.   Though it was already discussed in the preceding  paragraphs  about
the reliefs sought by the appellant before the High  Court,  we  deem  it
appropriate to extract the same hereunder:
      “(1)  a writ of Mandamus directing the first and second respondents
to issue a notification under Section 25(1) of the Customs Act, 1962,  in
order to exempt goods falling under Tariff Heading 2208.10 so as to  give
effect to the budget  proposal  announced  by  the  Finance  Minister  in
Parliament for financial years l993-94 and 1994-95;  (2)  a direction  to
the Chief Commissioner of Customs to finalize  assessment  of  the  eight
bills of entry after a notification is issued by  the  first  and  second
respondents under Section 25(1) of the Customs Act, 1962;  (3) a writ  of
Mandamus directing the second respondent to issue  a  notification  under
Section 25(2) of the Customs  Act,  1962,  for  granting  exemption  from
customs duty for goods falling under Tariff Heading 2208.10 for financial
years 1993-94 and 1994-95; (4) an order to refund after  assessments  are
finalized and (5) an order for the payment of interest at the rate of 12%
p.a. on the refund that is ordered.”
25.   The High Court of Bombay, after giving  a  thorough  consideration,
dismissed the writ petition on the ground that once a  particular  Tariff
Heading is prescribed, that constitutes the authoritative  expression  of
the legislative will of Parliament and the High Court cannot exercise its
power of judicial review and go beyond the law enacted by the  Parliament
and it is not permissible for  the  Court  to  undertake  a  scrutiny  of
whether there was an error on the part of the Parliament in legislating a
particular rate of duty.   Further, the High Court observed that there is
no discriminatory conduct which would  compel  the  interference  of  the
court. The  appellant,  unsatisfied  with  the  order,  has  preferred  a
revision before the High Court which ended up in dismissal  as  no  error
apparent on record has been made out.
26.   In those circumstances, the appellant is before us by way of  these
appeals; one arising out of the original order and one against the  order
passed in review.      Before this Court, the appellant has  amended  the
reliefs  and  sought  for  the  following  reliefs:   (1)    direct   the
respondents to perform their  duty  to  issue  suitable  notification  to
rectify the erroneous rate of duty prescribed on sub-heading 2208.10  and
to implement and execute the tariff rate already legislated;  (2)  direct
the respondents to return the excess amount of Rs.5,62,46,722/- collected
without any authority of law;   (3) direct the  respondents  to  pay  12%
simple interest for having willfully and deliberately refused to  rectify
the error.
27.   The appellant has come up  before  this  Court  with  a  voluminous
record and made submissions at  length.    The  gist  of  the  first  and
foremost grievance of the appellant appears to be  that  he  was  charged
with the duty @ Rs.300/- per litre or 400% which was already paid by  him
for the goods he imported as per the provisional assessment.
28.   According to him, the Finance Minister  has  presented  the  budget
proposals  before  the  Parliament  which  were  duly  approved  by   the
Parliament. As per the approved budget proposals, the goods  imported  by
him attracts reduction in duty higher than 85% to 85% advalorem for 1993-
94 and higher than 65% to 65% ad valorem for the year 1994-95 and he does
not fall under the exception of alcoholic beverages. The  tariff  he  was
charged and the tariff rates in the finance  bill  are  contrary  to  the
approved budget proposals.
29.   The second grievance appears to be that whenever the  tariff  rates
are erroneously prescribed, the 2nd respondent  is  issuing  notification
and in fact they have issued 85 notifications for the financial year 1993-
94  and  94  notifications  for  the  financial  year  1994-95.  The  2nd
respondent is  discriminating  the  appellant  by  refusing  to  issue  a
circular in respect of his goods; as such their action is  discriminatory
and violative of Article 14 of the Constitution of India.
30.   In view of the aforesaid rival submissions, the  issues  that  fall
for consideration are:

1) Whether the budget proposals, as alleged by the  appellant,  are  duly
 passed and approved by the Parliament and whether the tariff rates fixed
 by the TRU are contrary to the legislative mandate?


2) Whether this Court can  direct  the  Central  Government  to  issue  a
 notification under Section 25(1) of the Customs Act?


3) Whether the compound alcoholic preparations of a  kind  used  for  the
 manufacturing  of  beverages  fall  under  the  category  of   alcoholic
 beverage?


4) Whether there is  any  discrimination  on  the  part  of  the  Central
 Government in issuing a notification under Section 25(1) of the  Customs
 Act in respect of  other  goods  and  contrary  to  Article  14  of  the
 Constitution of India?

31.   In Re Issue No.1:
      The whole thrust of the appellant is  that  the  proposals  of  the
Finance Minister were duly approved by the  Parliament.   No  doubt,  the
appellant has placed before this  Court  the  proposals  of  the  Finance
Minister which discloses the intention of the Government but there is  no
material placed before us to demonstrate that the  budget  proposals  are
duly accepted by the Parliament.  It is an admitted fact that pursuant to
the proposals, the Finance Act was passed by the Parliament  wherein  for
the goods specified under Tariff Sub-Heading 2208.10,  particular  tariff
was specified.  We are unable to agree with the argument advanced by  the
appellant for the reason that he is unable to make note of the difference
between a proposal moved before the Parliament and a statutory  provision
enacted by the Parliament,  because  the  process  of  Taxation  involves
various considerations and criteria.
      Every legislation is done with the object of public good as said by
Jeremy Bentham.  Taxation is an unilateral decision of the Parliament and
it is the exercise of the sovereign power.  The financial  proposals  put
forth by the Finance Minister reflects the governmental view for  raising
revenue to meet the expenditure for the financial  year  and  it  is  the
financial policy of the Central Government.  The Finance Minster’s speech
only highlights the more important proposals of the  budget.   Those  are
not the enactments by the Parliament.  The law  as  enacted  is  what  is
contained in the  Finance  Act.  After  it  is  legislated  upon  by  the
Parliament and a rate of  duty  that  is  prescribed  in  relation  to  a
particular Tariff Head that constitutes the authoritative  expression  of
the legislative will of Parliament.   Now in the  present  facts  of  the
case, as per the finance bill, the legislative will of the Parliament  is
that for the commodities falling under Tariff Head 2208.10, the tariff is
Rs.300/- per litre or 400% whichever is higher. Even  assuming  that  the
amount of tax is excessive, in the matters of taxation  laws,  the  Court
permits greater latitude to the discretion of the legislature and  it  is
not amenable to judicial review.
      In view of the foregoing discussion, we are unable to  concur  with
the submission of the appellant that the budget proposals are duly passed
and approved  by  the  Parliament  and  moreover,  if  the  appellant  is
aggrieved by the particular tariff prescribed under the Finance  Act  and
the same is contrary to the approved budget proposals, he ought  to  have
questioned the same  if  permissible.   Hence,  this  issue  is  answered
against the appellant.
32.   In Re :  Issue No.2:
      It is the case of the appellant that in respect of other categories
of the budgetary proposals, several notifications were issued by the  2nd
respondent altering the Tariff rates, but whereas in his  case,  the  2nd
respondent refused to issue such a notification and  it  is  nothing  but
mala fide and corrupt practice on the part of the respondents.  According
to him, the budget proposals passed and approved by  the  Parliament  are
paramount and the Executive or Central Government cannot prescribe Tariff
rates contrary to the budget proposals and he finds fault  with  the  way
the 2nd respondent officials are functioning.
      A thorough look at the relevant provisions reveals that the  source
of power to issue notification  by  the  Central  Government  relates  to
Section 25 of the Customs Act, 1962, which reads as under:
      “Power to grant exemption from duty.

   1) If the Central Government is satisfied that it is necessary in  the
      public interest so to do, it may, by notification in  the  Official
      Gazette, exempt generally either  absolutely  or  subject  to  such
      conditions (to be fulfilled before or after clearance)  as  may  be
      specified in the notification goods of  any  specified  description
      from the whole or any part of duty of customs leviable thereon.

   2) If the Central Government is satisfied that it is necessary in  the
      public interest so to do, it may, by special  order  in  each  case
      exempt  from  the  payment  of  duty,  under  circumstances  of  an
      exceptional nature to be stated in such order, any goods  on  which
      duty is leviable.”

      Section 25 of the Act delegates power  to  the  Central  Government
i.e. the executive branch to grant exemption generally from duty whenever
it finds that it is necessary to do so  in  the  larger  public  interest
either absolutely or subject to such conditions as may  be  specified  in
the notification or by a special order in  each  case  under  exceptional
circumstances.
      As per Section 159  of  the  Act,  any  notification  issued  under
Section 25 shall be placed before the Parliament and the  Parliament  may
amend or reject the same.  This clearly demonstrates  that  the  ultimate
law making power is vested with the Legislature. Hence, the allegation of
the appellant that the notifications are issued basing on the  whims  and
fancies of the 2nd respondent is misconceived. Whereas, notifications are
issued generally in the larger public interest, the Legislature has given
the power to exempt duty to the 2nd respondent subject  to  the  amending
power.

      In these circumstances, it is not appropriate on our part to  issue
any orders directing them to issue a notification under Section 25 (2) of
the Act except on the  grounds  of  discrimination.   In  the  matter  of
taxation,  the  Court  gives  a  greater  latitude  to  the   legislative
discretion.  Accordingly, the issue is answered.

33.    In Re : Issue No.3:

       In  regard  to  this  issue  ‘Whether   the   compound   alcoholic
preparations of a kind used for manufacturing of beverages fall under the
category of  alcoholic  beverages’,  the  appellant  has  relied  upon  a
judgment of the Bombay High Court which was confirmed by this  Court  and
the  learned  senior  counsel  for  respondents   made   several   contra
submissions relying on some judgments.   According to us, it is  not  for
us to do this exercise.  It is always open to the parties to  settle  the
dispute before the appropriate forum if they choose to do so.  The  issue
is accordingly answered.

34.   In Re : Issue No.4:

      According to the  appellant,  the  Central  Government  has  issued
notifications under Section 25(1) and he  is  also  entitled  to  such  a
notification in respect of the commodities  falling  under  the  category
2208.10.  When the appellant alleges discriminatory action on the part of
the respondents, he has to establish that there is no rational basis  for
making classification between the goods which are notified and the  goods
of the appellant which are not notified.  It is also a firmly established
principle that the legislature understands and appreciates the  needs  of
its people.  A Taxing Statute can be held to contravene Article 14 of the
Constitution if it purports to impose certain duty on the same  class  of
people differently and leads to obvious inequality.  Such a  material  is
not placed before us to come to a just conclusion that the action of  the
respondents is discriminative.  Hence,  the  same  is  held  against  the
appellant.

35.   As far as the interest aspect is concerned, when the  appellant  is
not entitled for the relief, there is no  need  for  us  to  express  any
opinion on the interest aspect.

36.   Before we conclude, we would like to record  our  appreciation  for
the strenuous efforts put forth by the appellant and the kind of  efforts
he put in to collect the data.  We feel that it is not out  of  place  to
mention that the  appellant  has  presented  the  case  like  a  seasoned
professional with utmost skill and knowledge.

37.   In view of the aforesaid  elaborate  discussion,  we  reach  to  an
irresistible conclusion that the appeals,  being  devoid  of  any  merit,
deserve to be dismissed and are dismissed accordingly.  No costs.


                                                             ……………………………….J.
                                    (MADAN B. LOKUR)

                                                            ………………………………..J.
                                   (N.V. RAMANA)
NEW DELHI,
JULY 22, 2016

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